Definition
Outcome Budget
An outcome budget measures government spending against the actual results and deliverables achieved, rather than just the amounts allocated.
Traditional budgeting focuses on inputs — how much is allocated. An outcome budget adds a results lens, linking each scheme's spending to measurable physical and qualitative targets, such as kilometres of road built or children immunised. It is meant to improve accountability and value for money.
Ministries publish outcome frameworks tying funds to outputs and outcomes, which Parliament and the public can use to judge performance. The approach reflects a broader shift toward outcome- and performance-based governance championed by bodies like NITI Aayog.
Related terms
- Revenue vs Capital ExpenditureRevenue expenditure covers the government's recurring running costs, while capital expenditure creates lasting assets or reduces liabilities.
- Capital OutlayCapital outlay is the portion of government spending used directly to acquire or build physical and financial assets, the core of capital expenditure.
- NITI AayogNITI Aayog is the government's policy think tank, which replaced the Planning Commission and advises on long-term strategy and cooperative federalism.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.